By Vivienne Russell
24 August 2009
Sluggish public sector performance is costing taxpayers more than £58bn a year, economic analysts have said.
The Centre Economics and Business Research highlighted little-noticed Office for National Statistics figures which showed that public sector productivity declined by 3.4% between 1997 and 2007. In contrast, productivity in the market sector rose by 27.9% over the same period,
The CEBR said that, if productivity in the public sector had kept pace with that in the private sector, spending would have been £58.4bn less a year.
CEBR chief executive Doug McWilliams said: ‘The £58.4bn excess cost is roughly equal to the entire yield forecast for VAT this year… or to 42% of all income tax receipts.
‘Hard-pressed taxpayers will not take too kindly to finding out that not too far short of half of the income tax that they pay is simply to cover the cost of the increased inefficiency of the public sector that had occurred since 1997.’
McWilliams added that the increasing inefficiency of the public sector offered one reason why UK taxpayers did not feel their increased taxes had led to a commensurate improvement in public services.
‘It also gives some confidence that it may well be possible to make substantial cuts in UK public spending without too great an impact on the levels of services,’ he said.
24 August 2009
Sluggish public sector performance is costing taxpayers more than £58bn a year, economic analysts have said.
The Centre Economics and Business Research highlighted little-noticed Office for National Statistics figures which showed that public sector productivity declined by 3.4% between 1997 and 2007. In contrast, productivity in the market sector rose by 27.9% over the same period,
The CEBR said that, if productivity in the public sector had kept pace with that in the private sector, spending would have been £58.4bn less a year.
CEBR chief executive Doug McWilliams said: ‘The £58.4bn excess cost is roughly equal to the entire yield forecast for VAT this year… or to 42% of all income tax receipts.
‘Hard-pressed taxpayers will not take too kindly to finding out that not too far short of half of the income tax that they pay is simply to cover the cost of the increased inefficiency of the public sector that had occurred since 1997.’
McWilliams added that the increasing inefficiency of the public sector offered one reason why UK taxpayers did not feel their increased taxes had led to a commensurate improvement in public services.
‘It also gives some confidence that it may well be possible to make substantial cuts in UK public spending without too great an impact on the levels of services,’ he said.
